On the Block: The Yellowstone Club’s 160-Acre Family Compound

Nestled in the heart of the world’s only private ski and golf community, the 160-acre Family Compound is without question the most unique offering ever presented in the history of the Yellowstone Club. The story of the property dates to the founding of the club itself when Tim and Edra Blixseth retained ownership of a 160-acre site inside its boundaries. The couple built two 2,240-square-foot, 3-bedroom residences that were to serve as guest homes for a main residence that was never constructed.

Situated at the end of a long, secluded driveway, each of the cabins features an open floor plan, vaulted ceilings, massive wood-burning fireplaces, and large floor-to-ceiling windows. Beautifully appointed bathrooms and well-designed kitchens round out the interiors, while an expansive outdoor living area creates an ideal setting for nights out beneath the Montana sky. Yellow Mule Creek runs year round through the property’s western boundary.

It is this acreage and improvements that are to be auctioned by Edra Blixseth’s bankruptcy estate pursuant to a court-approved bidding and auction process. CrossHarbor Capital Partners has tendered a stalking horse bid of $10,850,000, consisting of $850,000 in cash and $10 million in a credit bid against CrossHarbor’s lien on the Family Compound. Per the court’s order, the minimum required for qualified competing bids by third parties is $11.1 million. Deadline for submission of the $11.1 million is 4:30 p.m. Mountain Time on May 16. The receipt of qualified competing bid(s) will result in an open outcry auction to be held at 9:00 a.m. Mountain Time on May 20, 2011 at the offices of Datsopolous, MacDonald and Lind in Missoula, Montana.

Membership to The Yellowstone Club is not included as part of this offering. The buyer may apply to The Yellowstone Club for membership, however, membership is not guaranteed. Independent investigation is advised. Additional information about the auction and the rules governing competing bids will be made available upon request.

To obtain a due diligence package and schedule a private viewing of the Family Compound at Yellowstone Club, please contact:

Bill McDavid
Hall and Hall
406-542-3762
mcdavid@hallandhall.com

Market Watch: JOE Announces New COO

The St. Joe Company (NYSE: JOE) has appointed veteran real estate executive Park Brady to be its chief operating officer. Brady will report to the  executive committee of the company’s board of directors, which includes Chairman Bruce Berkowitz and Interim CEO Hugh Durden.

Brady’s appointment is the latest in a series of steps taken since the late February resignation of President and CEO Britt Greene.

Also stepping down were board members Michael Ainslie, John Lord, and Walter  Revell. Among the new directors proposed by the company’s largest shareholder, The Fairholme Fund, were Berkowitz, Durden, and former Florida Governor Charles J. Crist.

The St. Joe Company is one of Florida’s largest real estate development companies and Northwest Florida’s largest private landowner with approximately 576,000 acres of land, concentrated primarily between Tallahassee and Destin.

Landmark Sale of 310,000 Acres Completed

In one of the largest conservation purchases to date, Plum Creek (PCL) completed the sale of a huge swath of Western Montana to the U.S. Forest Service and Montana’s Fish, Wildlife and Parks Department. Swiss philanthropist Hansjorg Wyss jump-started the deal with a $25 million donation that he subsequently upped to $35 million. Other funding sources included the State of Montana, which contributed $65 million, and the Department of Agriculture, whose $250 million expenditure was arranged by Sen. Max Baucus.

Harry Patten Honored By Horatio Alger Association

“Let me tell you a story.”

It’s the signature line of real estate pioneer Harry Patten (shown here with much of the Patten clan). No matter if he’s addressing industry leaders, encouraging his companies’ managers, or explaining business fundamentals to school kids visiting the Patten Family Foundation’s Finance Park at the Junior Achievement World Huizenga Center, it’s the way Harry shares a lifetime of insights and experiences.

Effective storytelling is an art, a crucial means of conveying concepts and instilling purpose, and one of its greatest practitioners was the American author Horatio Alger, whose “rags to respectability” novels featured poor boys who made good through “pluck and luck.” Over a century ago, Alger published more than 100 of these stories, and their impact was such that in 1947 the Horatio Alger Association of Distinguished Americans was formed to build on his legacy. To date, the association has awarded $87 million in scholarships to at-risk students who were determined to earn a college degree. It also recognizes leaders who, like Alger’s heroes, have risen to great heights from humble origins “through honesty, hard work, self-reliance, and perseverance.” Ray Kroc has been honored by the Horatio Alger Association. So have Bob Hope, T. Boone Pickens, Oprah Winfrey, and Tom Brokaw. In April, this distinguished group will be joined by 11 new members, including Leonardo DiCaprio, Michael Bloomberg, and Harry Patten.

Harry’s own story took shape five decades ago when he single-handedly pioneered the development, marketing, and sale of rural land. To hear him tell this tale is to marvel at the characters he has befriended throughout his career, individuals such as the brilliant mutual fund manager Sir John Templeton, whose investment acumen helped propel Patten Corp.’s 1985 IPO and made it the third-best percentage gainer on the New York Stock Exchange the following year. Templeton’s investment in Patten Corp. and his subsequent interest in owning land became the springboard for a valued friendship. The memory of another key ally, a former board member who played a crucial role in Patten Corp.’s success, brings to mind the current real estate market. “One of the reasons we’re very, very aggressive about buying land right now is that it reminds me of the opportunities in Texas in the 1980s. It was John Connally who opened up my eyes to the great values there. My son, Michael, and I went down and looked at a lot of real estate and a lot of ranches and eventually purchased our first Texas ranch from Gov. Connally. Back then was a great buying opportunity, and today’s market has the potential to be just as good. Or even better,” Harry says.

The Patten family’s ties to land date back to the Great Land Rush of the 1890s. The family homesteaded in North Dakota, but harsh winters and hostile Indians forced them back east. But Harry Patten Sr. had caught the land bug. In 1899, he paid $20 for his first parcel: 300 acres in Eastern Massachusetts. “My dad was a trader who bought and sold land, cattle, horses, timber. I was born being in business. He drilled it into me,” Harry says. This training led Harry to single out two factors: an endless stream of Bostonians and New Yorkers who wanted to own a few acres, and rural New Englanders who had their life savings tied up in farms but didn’t know the first thing about marketing. In stepped Harry Patten.

When Harry took his company public in conjunction with Drexel Lambert in 1985, annual sales rocketed from $18 million to $33 million and then $76 million. By 1988, revenues eclipsed the $100-million-mark. The Wall Street Journal described the rise of Harry Patten in a front page profile that ran above the fold:

“Sometimes it’s a place in the woods, a few hours’ drive from Boston and New York, where yuppies can rough it in their L.L. Bean boots. Other times it’s a pristine view of a sparkling Maine lake, a panorama of Vermont’s Green Mountains or a plot outside a picture-post-card Adirondack village. No matter. What’s important is that ‘people develop an emotional attachment to a piece of land,’ says Mr. Patten. ‘That makes it easy to sell.’”

Patten Corp. (now the publicly-traded Bluegreen Corporation) and National Land Partners/National Timber Partners, Harry’s current companies, have generated billions in revenues thanks to sold-out developments in 48 states and several Canadian provinces. But many current opportunities have little to do with the Pattens’ original business model. Nowadays, Harry and Michael, along with grandsons Brian and John Patten, sift through opportunities forwarded by bankers, other lenders, and even former competitors. While bankruptcy protection has become the refuge of some companies, the Pattens are working with hedge funds, pension funds, and international investors. Their lengthy track record and strong financial statements affirm their industry-leading status.

A new chapter in Harry’s story is titled the Patten Family Foundation. Harry’s philanthropy supports organizations that focus on health, education, and financial literacy. A particular passion of his has been educating children about the free enterprise system through Junior Achievement. The foundation funded Finance Park at the Junior Achievement World Huizenga Center, which opened in 2009 and now educates over 40,000 students per year. Harry is also a long-term supporter of Massachusetts General Hospital, and his foundation remains actively involved as the hospital expands its facilities and conducts major medical research. Recently he was asked to serve on the President’s Council at Massachusetts General. With his daughter Andrea, he co-wrote What Kids Need to Succeed, a book that outlines the four foundations of adult achievement: perseverance, hard work, discipline, and giving back to one’s community. What Kids Need to Succeed has been translated in four languages.

But Harry has no time to slow down. His deal-making acumen recognizes enormous opportunities in the current market for his family-owned businesses. An ever increasing number of entities seek to partner with him in new and promising ventures. And the success of his philanthropic efforts only makes him want to give more. “There are too many opportunities out there for me to even think about retiring,” he says.

Then he quickly adds, “Which reminds me … let me tell you a story.”

Adults Only – The New Interior Department Reality Show

Update: In a report to Congress on September 24, the Department of the Interior confirmed that the controversial Royalty in Kind Program will be phased out this Thursday, September 30. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEM) announced that the agency is successfully completing the orderly close-out of the Royalty in Kind Program, which accepted oil and gas in lieu of cash as royalty payments on federal energy resources. Interior Secretary Ken Salazar (shown here with BOEM Director Michael Bromwich) stated that all existing contracts would be allowed to expire and no further Royalty in Kind sales would take place.

Download the complete report to Congress HERE.

Originally posted September 12, 2008: The fine folks who gave America the Teapot Dome Scandal are pleased to bring their fellow citizens a sizzling new take on government outreach, including sex, drugs, and lucrative consulting contracts. The lurid scandal, which centers on Interior’s Royalty in Kind program, was co-produced by Chevron, Shell, Gary Williams Energy, and Hess Corporation. Hundreds of articles covering this topic are available via Google News, but consider this post at SLATE, which has hyperlinks to the internal investigations by Interior’s Office of Inspector General.

IP to Sell 163,000 Acres for $200 Million

International Paper (IP) will sell 163,000 acres in the Southeast for a minimum of $200 million to an affiliate of Rock Creek Capital, a Jacksonville-based asset management firm that invests in unique, resource-rich land. According to wire reports, IP will receive a minimum $160 million when the deal closes later this quarter. It will receive the balance, plus interest, within three years. The company will also receive 20% of the net profit generated from the land after the Rock Creek affiliate achieves “certain financial returns.”

Ask the Expert: Scott Jones

The second session of the 111th Congress is already under way, and landowners have a lot at stake. With that in mind, The Land Report turns to Scott Jones to get the inside scoop on Washington’s next steps. Since 2003, Jones has been the CEO of the Forest Landowners Association (FLA), whose members own and operate some 40 million acres of forestland in 48 states. Founded in 1941, FLA offers education, information, and national grassroots advocacy with the goal of sustaining forestlands from one generation to the next.

With so many bold initiatives taken on by the Obama administration, what are the chances of a climate bill passing this year? Would it benefit forest landowners?

American voters believe that a climate/cap-and-trade bill may cost jobs; as a result, I would not be surprised to see the climate portion of the energy bill removed. If crafted properly, an energy bill could benefit private forest landowners by creating new markets for wood. However, the definition of “woody biomass” still needs to be fixed for landowners to truly benefit from the stripped down version of the bill.

The federal estate tax dropped to zero this year. Do you expect it to return to 55 percent with a $1 million exemption as scheduled in 2011?

There do not appear to be enough votes to bring the death tax back to life in 2010. Sen. Scott Brown’s (R-MA) recent election created a political barrier to retroactive death tax reinstatement. Unless legislative action is taken, the tax is scheduled to permanently return at a rate as high as 55 percent in 2011. But this is an election year, so anything is possible. Polls indicate 65 to 70 percent of Americans want the tax repealed.

Name one other issue landowners should follow closely.

The Clean Water Restoration Act is definitely legislation every landowner should keep an eye on. It seeks to expand the jurisdiction of the Clean Water Act by redefining “navigable waters” as “waters of the United States.” The consequences of this bill are enormous, and it has already created a firestorm in the Senate. Strong opposition convinced Rep. James Oberstar (D-MN) to delay introducing the bill on the House side. Oberstar now intends to move the bill through the House by the end of 2010.

Ten Million Americans Own Timberland

Which asset class offers growth, a hedge against inflation, and has great tax benefits? Timber.

That’s one of the many interesting points brought out by this in-depth article that ran in Forbes last month. One of the other interesting elements the story touches on is that of the 500 million acres of timberland that exists in the U.S., government entities own 27 percent; wood and paper companies own 17 percent; and institutional investors such as funds and endowments own 4 percent.

The remaining 54 percent? It belongs to private citizens, and that number is up from 45 percent two decades ago.

Read more HERE.

6th Timberland Investment World Summit October 26-28

Come join The Land Report at the 6th Timberland Investment World Summit at the Millennium Broadway Hotel in New York City on October 26-28. This conference is absolutely essential for anyone who follows or invests in timberland, which is why The Land Report signed on as a sponsor.

Online (“Timberland Outperforms the S&P 500?”) and in print (Land Report Spring 2009), the Magazine of the American Landowner has extolled the virtues of timberland as a long-term investment opportunity.

The Timberland Investment World conference brings many major players together, including pension funds, hedge funds, endowments, family offices, TIMOs, REITs, forestry management companies, paper and forest products companies, law firms, and banks.

Among the many topics to be covered at the conference are:

- International prospects for timberland investments, including Brazil, China, Russia, Australia and New Zealand

- Macroeconomic perspectives on the future of global demand for wood products

- Cashflow generation opportunities represented by ecosystem services, carbon schemes, easements, and the market in woody biomass

-The impact of information technology on timberland investment returns

- Preparing for the implementation of a nationwide cap and trade system

- Principles for selecting between Timber Investment Management Organizations (TIMOs)

- The valuation process: appraisal, discount rates, and future lumber prices

- The impact of biotechnology on future timber yields and growth rates

For more complete details, click HERE.

Duke Energy Makes Major Investment in GreenTrees

Duke Energy has become the lead investor in GreenTrees, a privately managed forest restoration program created and managed by C2I for landowners in the Lower Mississippi Alluvial Valley: Illinois, Missouri, Kentucky, Tennessee, Arkansas, Mississippi, and Louisiana.

This enormous valley once held 24.7 million acres of forest and emergent wetlands. Today more than 18 million acres – or 80 percent – has been cleared, resulting in the loss of critical natural habitat.

The program is expected to generate high-quality, verifiable carbon offsets that Duke believes will help reduce the overall cost of compliance with federal climate change legislation. Duke’s initial investment will result in the planting of more than 1 million trees on approximately 1,700 acres in Arkansas.

GreenTrees is designed to create, enhance, and sustain conservation and wildlife benefits from afforestation. GreenTrees provides landowners the most economic and environmental value for each acre of trees planted. The program utilizes a specific inter-planting of 302 cottonwoods plus 302 mixed hardwoods per acre. The specific design of 302/302 delivers more conservation value, more carbon, and better sustainable hardwood revenues than a previous design of 302 cottonwood and 151 hardwoods.

In exchange for the landowners’ long-term lease to prevent reversibility, GreenTrees offers a variety of short and long-term income opportunities. Landowners can simultaneously enroll the same qualified acres into GreenTrees, CRP, and other conservation practices, thus receiving multiple financial incentives and incomes together.

GreenTrees was founded by Izaak Walton League of America board member Carey Crane and Texaco Chevron Conservation Award recipient Chandler Van Voorhis. Both men have received great inspiration from Crane’s mother, Maggie Bryant. Bryant is a past-two term Chairperson of the National Fish and Wildlife Foundation and retired from her board position in 2001. She has been awarded the prestigious Chevron Conservation Award as well as the Governor’s Award for Conservation in Mississippi, and she continues to be active in conservation measures around the world.

Landowners are enthusiastic about GreenTrees. Arkansas landowner Brandon Stafford is a recent enrollee. Stafford found himself with 210 acres of un-irrigated farmland that he had to do something with. He enrolled it in CRP and GreenTrees. After the initial planting and subsequent sprayings Brandon says, “It’s amazing what the trees are doing.” The CRP and GreenTrees programs work in concert for him. Currently over 2,500 acres from 20 landowners are enrolled in the program.

To learn more about GreenTrees, visit their website: www.green-trees.com.

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